Hospital CFOs' top concerns for 2016

From the effects of high-deductible health plans to how to remain profitable in the future, hospital and health system CFOs certainly face a myriad of challenges in 2016.

During a panel discussion at the Becker's Hospital Review 4th Annual CEO Roundtable + CFO/CIO Roundtable in Chicago, Scott Becker, JD, partner at McGuireWoods and publisher of Becker's Healthcare, asked each speaker to identify the most pressing issue hospital and health system CFOs will encounter in the year ahead.

Palo Alto, Calif.-based Stanford Health Care CFO Daniel Morissette said payment reform is at the top of his list, particularly concerning Medicare. "We really do believe much harder times are coming from a reimbursement standpoint," he said.

Moving from the West Coast to the Midwest, Cincinnati-based The Christ Hospital Network CFO Chris Bergman also sees erosion of the payer mix and revenue pressures as major challenges going into 2016. "It's not just the fact that we're going to get paid less for what we're doing. We're also seeing a shift in business," he said.

Mr. Bergman also highlighted how "CMS is nipping at little things," which makes him constantly worried they're going to reduce payments.

Mr. Morissette discussed the challenge of staying relevant in the market. Oakland, Calif.-based Kaiser Permanente and Sacramento, Calif.-based Sutter Health control about 70 to 75 percent of the market Stanford Health operates in. To stay competitive, Stanford has embarked on an extensive $5 billion expansion and modernization project. Regarding the enormous plan, Mr. Morissette said, "We really want to help heal humanity…and [we] have to have the scale to do it."

Uncertainty about the future was also mentioned by Donald Longpre, CFO of North Ottawa Community Health System, a single-hospital system in Grand Haven, Mich. "We're trying to evaluate all of the different services we have and evaluate how they will fit into what we believe is the future of healthcare," he said. Mr. Longpre also cited the health IT infrastructure and systems used within NOCHS as a perpetual challenge.

Although he's not a finance chief, Greg Jelinek, national sales director for healthcare treasury management at PNC Healthcare, has great insight into the concerns of hospital and health system CFOs. He said one of the biggest challenges healthcare CFOs are faced with is how to become more efficient. "A lot of systems are still living off of how they used to do business," he said.

He also highlighted the challenges presented by the increasing popularity of high-deductible health plans. Three-fourths of employers offer high-deductible plans, up from 53 percent five years ago, according to Towers Watson. "I think it's a huge issue, and these systems really have to put their arms around it," said Mr. Jelinek.